Lithium Mining in China

Lake Zabuye, China.

Lake Zabuye is a landlocked salt lake located at an elevation of 4,400 metres (14,400 ft.) in the Shigatse Prefecture of Tibet Autonomous Region, 1,050 km (650 mi) from Lhasa. The lake is surrounded by mountains with a height of 4,600–5,200 m above sea level. Itis fed by rain, underground water and melting ice. The lake gives its name to the mineral zabuyelite (lithium carbonate, Li2CO3), which was discovered here in 1987 and has been mined since 2004–2005. In 2008, the salt mine at the lake was regarded as the major source of lithium in China. Currently, Zhabuye Lithium owns 20-year exclusive mining rights for the Zhabuye salt lake.

The production of lithium from the salt lake water started in 2004–2005, after exploration work for the metal was initiated in 1982. In 1984, lithium was found in micro-fine sediments of the lake and considered amenable to refining in large quantities. The company involved with the extraction has a plant at the lake which had the total capacity of 5,000 tonnes and produced 1,556.5 tonnes of lithium carbonate in 2008. Its capacity was projected to increase to 20,000 tonnes in the near future. The company claims a reserve of 1.53 million tonnes Li (8.3 million tonnes of carbonate) but this estimate is considered as overly optimistic.

In the past few years, demand for lithium has exploded along with the growth of lithium-ion battery technology in mobile phones, personal digital assistants, laptops and, most recently, electric vehicles. The news came amid growing speculation that China would soon launch a highly competitive electric car.

With global conservation efforts directed on the mass production of ecologically friendly electric vehicles, demand for lithium is projected to more than double by 2020.

Most of the production needed to satisfy Chinese market will come from the South American Lithium Belt, a 500-mile-by-200-mile north-south strip centered on the junction of Argentina, Bolivia and Chile, which contains more than 75 percent of the world's lithium reserves.

It is believed that China is looking to become a global leader in the production of electric vehicles. China as a global growth center will play a major role in the dramatic increase in future demand for lithium, and that goal may require that the country go outbound to secure lithium supplies.

A small Chinese city of Yichun in Jiangxi hopes to become the next Asia's lithium capital by creating and developing lithium related industry worth CNY 100 billion over the next 5 years.

The city's mayor believes the metal is in high demand for use in batteries as governments and automakers push to get more electric and hybrid vehicles on the road. To achieve its ambitious goal, the city which had a total gross domestic product of CNY 70 billion in 2009 has created a lithium industry park sprawling over 20 square kilometers and is wooing investors with land use and tax incentives.

Mr Gong Jianhua the city's mayor said making all efforts in promoting investments to develop the lithium industry. It is being planned to develop a complete lithium value chain from mining to auto making. But analysts have warned that over capacity has already started to emerge in China's lithium industry casting a shadow on Yichun's grand plan.

they believe Yichun is on a bumpy road to realize its goal. Tibet and Sichuan in China also have large lithium reserves and lithium resources in the south eastern province of Jiangxi are largely in lepidolite that may prove more costly to extract. It's very hard to grow a complete lithium industry from just a single mine that is not among the best in China.